The sustained downturn is doing some screwy things to the economy, like reducing the price customers will pay for “core” offerings while making them more willing to spend on what used to be “extras.” Two examples of core offerings that are losing their pull: Computers and tickets to sporting events.
Bloomberg reports that Wal-Mart and Staples are slashing notebook prices to or even below the break-event point so they can sell more higher-margin accessories such as service, external hard drives or even computer bags. Turns out for every $1 customer spend on the computer itself, they spend 89 cents on accessories. Service, especially, is a high-margin item, which is why the helpful sales reps push it so hard. One source even compared it to movie theaters that make their profits not on the ticket sales, but on the concessions like $5 a bag popcorn.)
Meanwhile, the Los Angeles Times reports the Dodgers are making a killing selling special access to fans, such as – I told you this was wierd – 100 fans paying $100 each to do yoga with outfielder Andre Ethier (above). The three nights the team offered batting practice for fans under the stadium lights brought in another $170,000. Dodger’s President and CEO Dennis Mannion says events like these could eventually bring in more money than tickets, concessions or parking.
I’m left wondering, through, if there’s any way this could work for big-ticket, complex IT offerings or whether vendors are already doing all “give away the product and sell the services” (see: Linux) that they can. The closest we have to “fan access” is when beta customers get a break on pricing in return for steering the development efforts.
And I doubt that, say, EMC inspires enough love that customers would pay to write some microcode for a new disk arrays, the way Dodger fans can pay $1,500 to deliver the ball to the pitcher’s mound. But hey, if this turns into a profit center remember where you heard it first.